TERRE HAUTE —
The State Budget Committee is expected to act today on a request by Indiana State University to enter a long-term lease for a downtown student housing project.
In addition, on Thursday, the Terre Haute City Council is expected to discuss a proposed $1.2 million bond issue to help finance the mixed-use retail/residential facility, which involves a partnership between developer Thompson Thrift and ISU.
The 20-year bond issue would be repaid with 75 percent of new property taxes generated by the project over that period, called Tax Increment Financing. No city funds would be used to help finance the project, estimated to cost about $17.5 million overall.
The city council has its sunshine meeting Thursday and its regular meeting July 18.
Both approvals are key to moving the project forward, said Paul Thrift, president of Thompson Thrift Development.
“We’ve continued to make progress,” he said Tuesday. “Everything looks very positive.” He hopes to have final approval for the tax increment financing this month.
Once the approvals are in hand, Thompson Thrift will be able to close on the property, located between Fifth and Sixth streets on the north side of Wabash Avenue. At that point, the developer can proceed with full design.
“If everything falls into place, and a few other loose ends, by mid-August, we should be able to move forward,” Thrift said.
The four-story masonry structure would include three floors of student housing, with retail space on the ground floor.
Thompson Thrift would construct and own the building, and ISU would lease the residential space once the structure is completed. Thompson Thrift would lease the ground-floor retail space.
The 228-bed housing portion would feature four-bedroom suites, with two bedrooms on each side of a living and kitchen area.
The proposed structure would preserve the facades of the site’s existing buildings, except for the former Rogers Jewelers. ISU would pay to retain the historic facades of the existing buildings, estimated at about $2 million.
The historic preservation component, as well as annual lease payments of about $1.05 million, would be funded through ISU housing and dining system revenue, according to information provided to the Commission for Higher Education, which also approved the long-term lease.
Once Thompson Thrift has necessary approvals and closes on the property, the first step would be to construct a temporary steel structure to secure the historic facades, which Thrift anticipates would occur this fall.
The next step would be demolition of the buildings behind the facades, and the third phase would be new construction, which Thrift anticipates would start in early spring 2014. The goal is to have the project completed by summer 2015.
A portion of the project would be funded through tax-increment financing, Thrift said, which requires approvals from the city redevelopment commission and the city council.
The cost of assembling downtown properties and demolishing older structures is more costly than constructing a new facility on vacant property. “That makes it difficult to make something like this financially feasible,” Thrift said.
The tax increment financing provides an incentive to help bridge the gap, he said.
On July 17, the city redevelopment commission is expected to act on a resolution pledging 75 percent of the new property taxes generated by the project toward its construction.
That would be about $1 million over 20 years, said Cliff Lambert, executive director of the redevelopment department. The funds would be used to pay debt service.
On July 18, the city council will act on an ordinance to issue the $1.2 million in bonds; about $1 million would be for construction, and the balance for interest and other costs associated with a bond issue.
“They would be city-issued bonds repaid with TIF money,” Lambert said. While the project uses 75 percent of new property taxes generated (for 20 years), that still leaves the balance that will be available for other projects in the downtown TIF district, Lambert said.
Today, the State Budget Committee will consider ISU’s 30-year, long-term lease for the downtown student housing, according to Diann McKee, ISU vice president for business affairs. With that approval, ISU will be able to sign the long-term lease, she said.
Sue Loughlin can be reached at 812-231-4235 or email@example.com.